The U.S. and Canada signed an agreement to finally cool the long-running dispute over the trade of lumber. But the landmark deal likely isn't the end of the story.
Negotiators in Geneva signed the pact late Saturday -- Canada Day. The main feature seems to be that both sides agree to drop existing lawsuits and agree to abide by the terms of the new agreement for three years.
Canadian lumber producers will get a partial refund of the billions of dollars paid to the U.S. in the form of tariffs on shipments over the last several years. But otherwise the deal seems similar to the status quo. It calls for a new surcharge on Canadian wood shipped into the U.S. if the price falls much below the current level, which is in a historically high range. And Canada gets to keep its current 34 percent share of the U.S. wood market.
Eliminating lawsuits is an accomplishment. But unfortunately the deal doesn't solve the market imbalances that cause the trade friction in the first place. The dispute will return as long as Canada has a massive supply of government-owned trees and U.S. consumers demand cheap wood.
The biggest reason that the deal isn't a fix? The Canadians didn't get all they wanted and will finger the U.S. every time a Canadian mill closes and puts workers out of jobs.
Canada's parliament still has to okay the deal. You can be sure that the proposal will get lots of scrutiny, at least in Canada. On Sunday the deal was front-page news for the Victoria Times-Colonist. The Seattle Times put a wire story on A6.